U.K. economy grew 0.2% in Q2, leaving analysts pessimistic about future pace of economic recovery
August 26, 2011
– Britain's official statisticians confirmed Friday that the U.K. economy grew by just 0.2 percent in the second quarter, leaving analysts pessimistic about the future pace of recovery.
The second estimate of second-quarter growth released by the Office for National Statistics was the same as the figure released in July. Economic output in the second quarter was 0.7 percent higher than in the same period a year ago.
The agency says unusual events including a warm April and an extra holiday for the wedding of Prince William and the former Kate Middleton may have knocked half a percentage point off the quarterly growth figure. Some 300 million pounds ($490 million) of ticket sales for the Olympics won't be counted in the GDP figure until the event is held next year.
The U.K. economy has grown little in the past three quarters; a rise of 0.5 percent in the first quarter only made up for a half-percent drop in the fourth quarter.
Chris Williamson, chief economist at Markit, feared that this soft patch will be protracted.
"The business and consumer surveys indicate that growth most likely remained lackluster in July and August. With domestic demand increasingly hit by biting austerity measures and exporters still struggling due to ongoing sluggish economic growth in the U.K.'s main trading partners, it looks unlikely that economic growth will accelerate in the third quarter," Williamson said.
Anna Smee, managing director of Hundred Consulting, said the British economy was vulnerable to global trends.
"With our two main export markets, the U.S. and Europe, in a state of disarray, and consumers more cautious than ever at home, growth in the third and fourth quarters is unlikely to inspire," Smee said.
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